24 September 2017
Find out more

ANZ and Westpac put bank guarantees on the distributed ledger

10 July 2017  |  10532 views  |  1 Sydney Modern Buildings

ANZ, Westpac and IBM have successfully completed a trial run of distributed ledger technology to update the decades-old process of issuing, tracking and claiming on bank guarantees.

The trial, run with shopping centre operator Scentre Group, used the Linux Foundation's Hyperledger Fabric V1.0, to eliminate the need for current paper-based bank guarantee documents, resulting in a single source of information with reduced potential for fraud and increased efficiency.

In addition to eliminating the need for physical document management, the trial also addressed other inefficiencies in the current bank guarantee process, including the challenges in tracking and reporting of a guarantee’s status through multiple changes.

Commenting, Mark Bloom, Scentre Group CFO believes the technology has the potential to address a major pain-point: “With approximately 11,500 retailers across Australia and New Zealand, who use guarantees to support rental obligations, manual tracking of guarantees has been an extremely cumbersome and labour intensive process.”

Nigel Dobson, general manager wholesale digital, digital banking at ANZ, adds: “We have been keen to avoid the hype surrounding blockchain and distributed ledger technologies, and instead focused on practical and deliverable use cases."

Both ANZ and Westpac believe the approach has the potential for industry-wide adoption, with the next step to invite other organisations to participate in a larger pilot

Andrew McDonald, general manager corporate and institutional banking at Westpac, comments: “This is about removing the cost of fraud, error and operational risk that will continue as long as bank guarantees remain paper-based and manually issued.

“Next steps involve encouraging all industry players to adopt this technology so we can better protect and save money for our customers. Beyond that there is no reason why this couldn’t be applied across other industries.”

Comments: (1)

Michael Fuller
Michael Fuller - None - London | 10 July, 2017, 13:14

The old banking joke was that a Guarantee is: "Where someone who can't pay, gets another who can't pay, to say he will".

Better tracking of retail obligations will be helpful but ultimately it is the interconnectedness of liabilities and creditworthiness of the retailers that matters. Transparency may lead to some unintended consequences as the extent of the interconnected liabilities becomes clear.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

ANZ brings in former IBM CIO Smith for agile push

ANZ brings in former IBM CIO Smith for agile push

01 June 2017  |  7420 views  |  0 comments | 6 tweets | 5 linkedin
ANZ and Wells Fargo test distributed ledger tech for correspondent banking

ANZ and Wells Fargo test distributed ledger tech for correspondent banking

10 October 2016  |  18497 views  |  0 comments | 39 tweets | 50 linkedin
Silicon Valley trip teaches ANZ that it's OK to fail

Silicon Valley trip teaches ANZ that it's OK to fail

04 September 2015  |  10055 views  |  1 comments | 19 tweets | 15 linkedin
ANZ and Royal Bank of Canada to engage with IBM's Watson

ANZ and Royal Bank of Canada to engage with IBM's Watson

22 May 2013  |  11185 views  |  0 comments | 15 tweets | 9 linkedin

Related company news


Related blogs

Create a blog about this story (membership required)
visit www.capgemini.comvisit www.sibos.comvisit www.abe-eba.eu

Top topics

Most viewed Most shared
HSBC switches on selfie payments in ChinaHSBC switches on selfie payments in China
13391 views comments | 28 tweets | 44 linkedin
AXA launches blockchain to cover late flight compensationAXA launches blockchain to cover late flig...
9742 views comments | 13 tweets | 28 linkedin
Apple P2P payments service nears launchApple P2P payments service nears launch
8591 views comments | 19 tweets | 27 linkedin
SBI Ripple Asia advances on South KoreaSBI Ripple Asia advances on South Korea
8365 views comments | 16 tweets | 1 linkedin
European Commission makes fintech a priority in supervisory shakeupEuropean Commission makes fintech a priori...
8076 views comments | 32 tweets | 45 linkedin

Featured job

Competitive base + commission + benefits
Denmark, Finland, Iceland, Norway or Sweden

Find your next job